Jim Cramer said on Tuesday that retail investors on Reddit are “spreading their wings,” pointing to a discussion about r/WallStreetBet. That caused the case of fast food chains. Wendy’s Co. (NASDAQ:WEN) CNBC reports.
What happened: The television personality singled out a Reddit post by user Chillznday, which explains why Wendy’s is the perfect stock for “their favorites.” WallStreetBets or WSB subreddit
Chillznday talks about the new summer salad. Wendy’s social media involvement involving meme and “chicken tendon” are some of the factors that make stock a good fit for WSB.
The Reddit post also discussed the technical side of Wendy̵7;s stock and mentioned a low $17 million float, 4-10% being short. “A very predictable stock.”
Wendy’s shares jumped 25.85 percent in regular trading on Tuesday. and an additional 4.78% in after-hours trading to $30.25.
SEE ALSO: Is Jim Cramer Mocking the Beef Short Squeeze? Understand his confusing tweets.
Why is it important: Cramer noticed that Wendy’s share price was strengthened by Chillznday and other anonymous posts.
“I want you to forget the analyst now. Wendy’s in charge is Reddit user Chillznda,” Cramer said, according to CNBC.
The analyst also pointed out that the WSB group “spreads its wings, even favoring institutions like Wendy’s, with very low short positions”.
SEE ALSO: Is Wendy’s The Next Reddit Rally Stock?
Wendy’s move, according to Cramer, is an exit from the short-term squeeze, the focus of the WSB, leading to stocks such as GameStop Corporation (NYSE: GME), BlackBerry Ltd (NYSE:BB), and AMC Entertainment Holdings Inc. (NYSE: AMC) Soared
Cramer said the way stocks are valued by new investors is important.
“If enough people with enough money start valuation in a different way. Their new metrics are also important. Even if you think it is ridiculous,” said the former hedge fund manager.
WSB investors are expanding their horizons. Another stock that has become the new darling of Reddit investors this week is Clover Health Investments Corp. (NASDAQ: CLOV)
Continue reading: Wall Street still bets on AMC shares but looks like selling short: report
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